Trivial commutation (TC)

venster

Good morning. 

I have a question about TC which I hope is a simple yes or no answer. 

My wife currently has a pension which pays £672pm. 

She also has another pension that we are looking at taking.  

One of the options is to TC this pension but I dont think we can because of her current pension - which I think takes her over the limit. 

If I’m right, £672x12x20=£161,280.00 Obviously a lot more than £30k

Am I correct we can’t TC the second and have to take the standard pension?

Thanks

Marcon

venster said:

Good morning. 

I have a question about TC which I hope is a simple yes or no answer. 

My wife currently has a pension which pays £672pm. 

She also has another pension that we are looking at taking.  

One of the options is to TC this pension but I dont think we can because of her current pension - which I think takes her over the limit. 

If I’m right, £672x12x20=£161,280.00 Obviously a lot more than £30k

Am I correct we can’t TC the second and have to take the standard pension?

Thanks

How much is the second pension and what type (ie defined benefit or defined contribution) is it?

Silvertabby

How much is the second pension worth?  (annual pension X 20 plus 1 X any lump sum).

If less than £10K, then she MAY be able to take it under de minimis/small pot rules, but it depends on the scheme rules.

If it's over £10K then you are right - she can't take a trivial commutation as the total of all her pensions (excluding the State pension) exceeds £30K.

venster

As per my first post, she get £672pm and it’s DB pension I think..

so it’s a no. 

Out of interest, what would happen if we just decided to opt for  TC- claiming ignorance!

venster

Second pension would be £769 pa (x 20= £15380)+ £5000 lump sum. It’s NHS one. 

Marcon

venster said:

As per my first post, she get £672pm and it’s DB pension I think..

so it’s a no. 

Out of interest, what would happen if we just decided to opt for  TC- claiming ignorance!

A right mess would ensue when it is routinely reported to HMRC, as it will be by the scheme...don't be tempted.

Silvertabby

venster said:

Second pension would be £769 pa (x 20= £15380)+ £5000 lump sum. It’s NHS one. 

Then it's a no.  As would be taking it as a trivial commutation under false pretences.  HMRC would find out, and your wife would be hit with a huge tax penalty.  

venster

Thanks everyone for confirming what I thought. We won’t be doing the TC btw 
👍